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Human Resources Newsletter

April 2013, Issue 2

Payroll non-compliance places Australian companies at Risk

According to the director of Australian Payroll Association (APA) Tracey Angwin, an alarming number of Australian companies are non-compliant in meeting statutory payroll requirements (APA). Moreover with the recent changes to the Fair Work Act at the end of 2012, if a business is not fully

Continued on What drives employee performance?

Employees who feel that they are engaged, valued and part of an organization will feel driven and increase organisational performance.

Essential HR for SMEs

The most valuable aspect of any business is its staff; however having an in-house HR employee to manage staff can be a bit of a luxury for most SMEs.

Book Review A Gift to My Children by Jim Rogers

Legendary Investor Jim Rogers book A Gift to My Children, is unlike his past books. Instead it is his effort to share his wisdom and insights about finance, investing, and life in general.

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What drives employee performance?

Employees who feel that they are engaged, valued and part of an organization will feel driven and increase organisational performance. To achieve driven employees there are two important questions employers should ask themselves: Why does an employee stay when a competitor offers them more money? Why does an employee leave, going to a similar position for less money?

The answer? - It all comes down to feelings!

There will always be a financial element to most positions, however these days employees seek environments where they will be respected, have job satisfaction and feel a sense of achievement. Carl Buechner, singer for the band Earth Crisis from Syracuse, New York, United States articulates this with his quote: People will forget what you say, they will forget what you do, but they will never forget how you made them feel. Engaged employees are more committed to the success of an organisation. Intellectually and emotionally; they are the ones who go the extra mile; are more efficient; have lesser stress levels; have greater work satisfaction and stay longer with the organisation. Additionally employees who have a clear understanding of the corporate vision will also drive employees in the workplace. Managers should spend time ensuring staff understand the corporate vision of how the organisation wants to operate in the future and how it links in with staff position descriptions. Conclusively employees who understand the bigger picture and can see where their contributions are going, and how it contributes to the organisation will be more motivated to achieve the companys goals. Driven employees will therefore result in higher employee performance, as well as contributing to a more positive working environment.

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Essential HR for SMEs

The most valuable aspect of any business is its staff; however having an in-house HR employee to manage staff can be a bit of a luxury for most SMEs. Statistics show that up to 40% of the nations workforce are employed in Australias SME sector. Subsequently it is essential for SMEs to understand the importance and significance HR can have in generating and maintaining their business success. Employing the wrong staff or a high turnover of staff in a small business can be catastrophic as these people often take away important intellectual property and countless hours of training that cannot be easily replaced. Therefore attracting and employing the right staff is not only essential, however just as important as retaining and managing them. HR plays a very important role in recruitment, retention and everyday staff management. In many cases SMEs are often missing HR basics which would benefit their business by assisting management of the employment relationship with their staff just that much easier. Some of the most critical basics are outlined in this article:

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Recruitment Attracting the right people is a critical part of building a successful SME. This process includes tasks from position descriptions, to writing the ad, to reference checking and ultimately selecting the best person for the role. Accordingly, a thorough recruitment process and strategy is essential. Position descriptions (PDs) for example, serve a number of purposes and feed into important people practices not only for recruitment, however also for measuring individual performance and determining the right structure for your business. PDs don't need to be a meticulous list of all the tasks involved in a particular role. Just cover off the key responsibilities, including expected behaviours and KPIs (Key Performance Indicators) relevant to the role. Past experiences, qualifications and personal attributes can also be included in PDs as they will be useful if you ever need to recruit for the role. As for a SMEs recruitment strategy - How do you plan to attract the right staff to help grow your business? What experience will they have? What are the market rates for their skills? Why would an employee work for you over another company? If you have an effective recruitment strategy, you will be much better positioned to answer these questions and make successful hires. To the unskilled SME owner, this process can be intimidating as well as one that cannot only be time consuming and expensive, however it is also one that holds high risk and can have long lasting effects for the business. No one wants to invest time and money into someone who is the wrong fit for the business and this is where engaging with a HR professional can be invaluable.

Employment Contracts We know this may seem a case of pointing out the obvious, but contracts should be in place with all of your employees. The number of businesses who don't have proper employment contracts in place with their staff is amazing. Another important point of consideration is that it definitely pays to have an employment lawyer look over your contracts. This will make sure that all your bases are covered, that the correct terminology, etc., is used in your contracts, and that they are up-to-date with the everchanging Employment Legislation. Even if your employees have been working without a contract to date, it's never too late to put contracts in place. Correct Remuneration It's all too often that you hear of businesses being caught out for not paying their employees the correct wages. Not only does it cost businesses thousands of dollars in back pay but it can also cost them their reputation. Thus there is really no excuse for ignorance by employers. SME owners need to get familiar with all of the conditions and rates in the relevant Awards. Unfortunately most modern Awards aren't very easy to follow and can be incredibly confusing, especially with all the transitional provisions currently in place. Nevertheless there is help out there. So either contact Fair Work or engage with a HR expert to make sure you're on the right track. Furthermore you will need to audit your pay rates on a regular basis to keep up with any legislative changes, subsequently you will need to commit to doing this at least once a year. Policies and Procedures Appropriate policies (e.g. safety, discrimination and bullying) not only meet

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your obligation as an employer, however also provide a safe and discrimination free workplace for staff. Vantage Performance asks Are you spending more time working IN your business rather than ON your business? If the answer to this question is yes, then investing time in developing procedures and processes can increase your business and staffs performance and efficiency. These policies could be anything from recruitment processes, OHS, discrimination and harassment, to performance management anything that helps you to navigate processes more effectively as well as enabling yourself and your employees to have clear guidelines to work from. Policies and Procedures are therefore critical in your business to provide advice, guidance and support for employees and SME owners alike. If your business does not currently have the know-how to create appropriate and compliant policies and procedures, it is vital that you engage with a professional. Conclusively, part of growing a business is letting go of control at some stage and also to consider the opportunity cost. If it is getting too much doing the marketing, accounts, business development, human resource and day-to-day administration yourself, perhaps you would be better off hiring a part-time employee, a consultant or outsourcing one of these essential functions. Sometimes spending money on additional resources is worthwhile if it frees up your time to focus on the business.

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Payroll non-compliance places Australian companies at Risk

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compliant with their payroll systems they risk considerable fines by the Fair Work Ombudsman (FWO). HC Online reports examples of payroll incidents reported by the FWO in March 2013. The payroll function is often associated with or as a part of the finance, admin or HR departments. On account of this many payroll mistakes occur due to unqualified staff managing what is a very complex process and therefore inefficient payroll practices exposing the business to serious risk. In addition to constantly changing legislation, as well as local, state and national payroll compliance standards, payroll has become a profession in its own right, which businesses must recognise. Constantly incorrect payroll processing can become a HR issue. If Employees lose faith that their pay will ever be correct it can negatively effect morale and consequently have an adverse effect on employee turnover (HR Daily). Furthermore depending on the industry of the business, industrial action may also result. So what can businesses do to minimise the risk of non-compliance? To assist your business complying with legislation a start would be to keep on top of your payroll software. There are many payroll software options and pricing plans to chose from. Our advice would to not go with the cheapest option as they only include the basics rather than assisting the SME business with end-to-end payroll. Moreover most small business owners and employees do not have the luxury of time to attend training for payroll and updates thus leaving the business open to failing to comply with

ever changing legislation and standards at local, state and federal levels. SMEs should therefore take time to invest in software that is flexible and ensure that it is updated regularly. If you employ staff to look after your payroll, you should ensure that those employees attend regular training for payroll updates. If that employee also looks after tasks other than payroll, ensure that they receive adequate administrative and management support so that they can focus on payroll and prevent avoidable human errors. Lastly if your business does not want to or cannot hire a qualified employee to look after the payroll function, then the best alternative would be to outsource the payroll function to specialists to ensure your businesses compliance. For more information check out: Australian Payroll Association www.austpayroll.com.au

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Book Review A Gift to My Children by Jim Rogers

Legendary Investor Jim Rogers book A Gift to My Children, is unlike his past books. Instead it is his effort to share his wisdom and insights about finance, investing, and life in general with his two young children. Dont let the slimness of this book or the direct address to Rogers small children fool you. This book is beneficial not just for investors or Rogers children. It includes lessons on investing, the inevitability of change, and viewing the world from a global perspective, as a world citizen, rather than allegiance to one nation or society that everyone will find useful. Each chapter of the book is a lesson to be learnt. The book begins with Rogers asserting the importance to think for yourself rather than let others decide for you. He reiterates that in all cases you should learn everything you can about something to be able to make informed decisions. He discusses moving away from the status quo and avoiding following the herd. In the third chapter Rogers focuses on something important which many of us have forgotten attention to details. He states Attention to details is what separates success from failure. Further on in the book Rogers asserts the important of education. He first focuses on how we need to be aware of the world and how it works. He encourages the reader to go

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see the world not only to broaden their perspective, however also to get to know themselves and their strengths and weaknesses. He then discusses the importance of learning philosophy in order to learn to think for yourself; history with the intention of learning how the world works and that nothing is really new; and lastly the advantage of learning other languages, and that one of them should be Mandarin as he believes this will be the next Global language. Throughout the book Rogers insists on pursuing and focusing on what you are passionate about in order to be happy and successful. In other words, dont get stuck in a job that you dont like, as you wont end up being happy, which is a dependency for success. Rogers concludes by discussing the need to look to the future as well as embracing change, as refusing to accept change is like swimming against the current of a thundering river. The lessons from Rogers life experiences are what he believes are the most valuable so that his daughters, and the reader can learn to lead happy successful lives. Moreover we believe that this book is a must read for all business owners, managers, and employees in order to learn the lessons to be successful in todays business climate.